Because the United States spends comparatively more than other countries on higher education, when expenditures on all levels of education are calculated--pre-primary, primary, secondary, and post-secondary--America is in a three-way tie for second place among the 16 industrialized countries examined within this report; however, when spending for primary and secondary education alone is compared with expenditures abroad, the U.S. ranking falls to a tie for 12th place. And when adjustments are made for enrollment size, America drops to 14th place. When only public spending levels on education are compared, again the United States ranks 14th of the 16 industrialized nations. America's comparatively weak investment in K-12 education is not the result of an efficient administrative structure or favorable demographics; instead, due to the unique characteristics of the American school system and society, the United States might be expected to spend proportionately more than other countries. The spending gap appears particularly wide between the youngest American and foreign children. Many of our competitors have a stronger commitment to early childhood education, and some have nearly universal prekindergarten enrollments. Given the investment level in elementary and secondary education, it is not surprising that America is also slipping behind in comparative performance measures. The methodology for comparing expenditures and the education share of national spending are appended. (10 tables, 16 endnotes, 5 references) (KM)